Credit Cards

Best premium credit cards for low spenders?

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  • Sep 1st, 2021 11:15 pm
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[OP]
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Mar 1, 2019
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Best premium credit cards for low spenders?

What are the best premium credit cards for low spenders? Mostly I'm imaging someone who earns enough money to meet the income requirements but still lives a relatively frugal lifestyle, but it could also be someone who qualifies for the premium cards by virtue of household income and doesn't actually spend much themselves.

If you qualify for premium cards there is still value in getting them, even if you don't have a high annual spend. Certainly in such cases you would would want to avoid paying annual fees, but that doesn't mean your choices would be restricted to no annual fee cards either. Many banks will rebate the annual fee on a high-end credit card if you have their high-end chequing accounts, and it's likely a person in this situation would easily be able to meet whatever minimum balance they'd need to get the monthly bank account fees waived.

With low spending the "return" of the card becomes a much less important factor, and the insurance and other perks that come with the card become a relatively much more important factor. The insurance might be the main reason someone with a low spend would still be interested getting a premium card, especially if they could swing it without it costing them anything more then a more basic card would. Or maybe they'd still want to get the best rewards on what they do spend, even if it doesn't come out to much in absolute terms.

I'm thinking the BMO eclipse Visa Infinite is a strong contender here because of the $50 annual lifestyle credit and the insurance it offers, and you'd only need a $6000 balance in a BMO chequing account to get the annual fee rebated every year (alternatively BMO offers a family plan so they can piggy-back on someone else in their household who has premium chequing). Even if the rewards rates aren't as strong as other options the lifestyle credit becomes relatively more valuable the lower your spend is.
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Deal Expert
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Jan 9, 2011
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Vancouver
I recommend Meridian Credit Union cash back Visa Infinite. It has one of the best insurance packages you can get for a $99 annual fee, lower than most other cards. The 4% on groceries and gas are nice too, but I find the insurances alone to be worth the $99.

Other cards worth considering:
Scotia Amex Gold $120)
Scotia Amex basic (the red one), some of the best perks and benefits you can get for no annual fee
Deal Fanatic
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Nov 14, 2003
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LaLaLand
If you have $100k in investments at CIBC the Smart Plus Account is free, provides free unlimited banking and a $139 annual rebate on a credit card annual fee. There is also a $300 sign up bonus. I'm not a fan of parking cash in a chequing or savings account because I can be making much more money from an investment.
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batcave wrote: I'm not a fan of parking cash in a chequing or savings account because I can be making much more money from an investment.
It can depend. Vancity's monthly chequing account fee is $7.75, or $93/year. That's already low by other banks' standards. It is waived by keeping only $1,000 in a chequing account. That's the equivalent of a 9.3% "return". If you can show me who else is offering a GIC with that kind of return, I'm all ears!
Sr. Member
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Feb 28, 2012
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Vaughan
I was looking at this card too, I'm moving on from Air Miles world elite at the end of the year. I'm leaning towards their cashback mastercard right now with no annual fee.

I'm not a fan of BMO (or any bank) waiving their annual premiums for having 6k in the bank. That's a lot to tie up just to waive a $120 or $240 annual CC fee. I did the minimum 3k to avoid monthly banking fees for many years.

This summer I took the 6k and dumped it into crypto as a "banking fund". The 6k pays me $12/week so every month I transfer $50 into my bank account. From that I now pay $10.95 for my banking plan, and whatever annual CC fee I will end up paying next - but it feels good not having to keep that 3k in the bank doing absolutely nothing to avoid the monthly plan.
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Nov 14, 2003
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Kiraly wrote: It can depend. Vancity's monthly chequing account fee is $7.75, or $93/year. That's already low by other banks' standards. It is waived by keeping only $1,000 in a chequing account. That's the equivalent of a 9.3% "return". If you can show me who else is offering a GIC with that kind of return, I'm all ears!
Where did I mention a gic as an investment? I find more money under my couch cushions than gics pay. Astonished Face My worst performing investment over the last two years was RY, which is 30% on straight stock gain - and this doesn't include the dividends.

People shouldn't be paying for the illusion of free banking.
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Nov 14, 2003
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LaLaLand
Kiraly wrote: I compared fee waivers to GICs because the returns on both are guaranteed, unlike high-yield investments that are not.
Bank fees are a shell game. They use the money to make more money. I avoid bank fees and do what they do. I've survived three bank stock downturns and I am still ahead of gic returns.
Sr. Member
Feb 28, 2014
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VerticalTab wrote: What are the best premium credit cards for low spenders? Mostly I'm imaging someone who earns enough money to meet the income requirements but still lives a relatively frugal lifestyle, but it could also be someone who qualifies for the premium cards by virtue of household income and doesn't actually spend much themselves.

If you qualify for premium cards there is still value in getting them, even if you don't have a high annual spend. Certainly in such cases you would would want to avoid paying annual fees, but that doesn't mean your choices would be restricted to no annual fee cards either. Many banks will rebate the annual fee on a high-end credit card if you have their high-end chequing accounts, and it's likely a person in this situation would easily be able to meet whatever minimum balance they'd need to get the monthly bank account fees waived.

With low spending the "return" of the card becomes a much less important factor, and the insurance and other perks that come with the card become a relatively much more important factor. The insurance might be the main reason someone with a low spend would still be interested getting a premium card, especially if they could swing it without it costing them anything more then a more basic card would. Or maybe they'd still want to get the best rewards on what they do spend, even if it doesn't come out to much in absolute terms.

I'm thinking the BMO eclipse Visa Infinite is a strong contender here because of the $50 annual lifestyle credit and the insurance it offers, and you'd only need a $6000 balance in a BMO chequing account to get the annual fee rebated every year (alternatively BMO offers a family plan so they can piggy-back on someone else in their household who has premium chequing). Even if the rewards rates aren't as strong as other options the lifestyle credit becomes relatively more valuable the lower your spend is.
Unless you're going to do enough spending to make the annual fee worth paying, it might still not make sense to get a card that has an annual fee. If you can still clear $15k/year spend, the Rogers World Elite MasterCard can be a pretty good contender for a premium card that comes with no annual fee.
Kiraly wrote: I recommend Meridian Credit Union cash back Visa Infinite. It has one of the best insurance packages you can get for a $99 annual fee, lower than most other cards. The 4% on groceries and gas are nice too, but I find the insurances alone to be worth the $99.
I also back the Meridian Cashback Visa Infinite as well. For a card with an annual fee, it gives a lot of value. Yes, the fee can't be waived with a premium bank account but if you have high grocery & gas spend and want the added insurances, it's a card that's hard to beat. The CIBC Dividend Visa Infinite is pretty close too but they recently increased the AF but its insurances are not as good but it does have a 2% dining & recurring bill category.
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Jul 16, 2019
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Kiraly wrote: It can depend. Vancity's monthly chequing account fee is $7.75, or $93/year. That's already low by other banks' standards. It is waived by keeping only $1,000 in a chequing account. That's the equivalent of a 9.3% "return". If you can show me who else is offering a GIC with that kind of return, I'm all ears!
It's only a 9.3% return if the account is actually worth $93/year. If you can get a good chequing account for free (which you can), then that $1000 can serve you better in a HISA or being invested in an ETF.

The great thing about Vancity is they have branches in BC. If that's important to you, check out Coast Capital Savings and First West Credit Union. Depending on where you live in BC, First West will go by the name Envision Financial, Island Savings, Valley First, or Enderby & District Financial. If branch access isn't important to you, there are other good free chequing accounts.
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Jan 12, 2017
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Scarberia
Kiraly wrote: I recommend Meridian Credit Union cash back Visa Infinite. It has one of the best insurance packages you can get for a $99 annual fee, lower than most other cards. The 4% on groceries and gas are nice too, but I find the insurances alone to be worth the $99.

Other cards worth considering:
Scotia Amex Gold $120)
Scotia Amex basic (the red one), some of the best perks and benefits you can get for no annual fee
if i downgrade from amex gold to the red one, do i keep all my scotiabank pts? i hardly use my amex gold anymore...i want to close my ultimate 5k account asap! its just wasting there no interest! :(
*SIG: Ryzen R5 2600 cpu w/ ASrock B450M OCd to [email protected] stock cooler 16gb ram win10 pro w/radeon rx460 rogers Gigabit<< xb1 gamertag: mikka2017 >>
Deal Guru
Dec 5, 2006
13064 posts
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Markham
We need first define "low spending ". In a lot cases, RFD's definition of "low" is more than canadian average

So let's say low spending = how much annual spend?
[OP]
Newbie
Mar 1, 2019
51 posts
39 upvotes
smartie wrote: We need first define "low spending ". In a lot cases, RFD's definition of "low" is more than canadian average

So let's say low spending = how much annual spend?
I think a useful range would be anything less then $15k, as that would disqualify cards that have a minimum annual spend of 15k per year. Essentially any card that will require you to reach a certain spend should be taken out of consideration. And that way we don't have to think too hard about what levels of spending qualify as "low".
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May 7, 2017
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HSBC PWE seems to do just fine. Effective fee is $50 - no required spending either as far as I know.
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Dec 5, 2006
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Markham
VerticalTab wrote: I think a useful range would be anything less then $15k, as that would disqualify cards that have a minimum annual spend of 15k per year. Essentially any card that will require you to reach a certain spend should be taken out of consideration. And that way we don't have to think too hard about what levels of spending qualify as "low".
So pretty much 1000 per month and no no fee MasterCard WE.

I assume this "spending" doesn't include bill payment such as property tax, hydro...

Of 1000, 400 will be grocery and 600 left for anything else, so what kind of insurance or perks do you refer to? In terms of customer segment, do you refer to a downtown hipster who is single and spends minimum on groceries, but a more money on restaurants, museum, bar, concert and might be some level travel?

From your post, you seem to target people who earn middle to high salaries but don't like spend a lot on material but rather have a minimalist lifestyle?

I guess I don't understand this part:
"With low spending the "return" of the card becomes a much less important factor, and the insurance and other perks that come with the card become a relatively much more important factor. "
[OP]
Newbie
Mar 1, 2019
51 posts
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Poutinesauce wrote: This thread is an oxymoron, those who spend very little, in almost all cases, will not qualify for Visa Infinite or MasterCard World/World Elite.

Most of RFD lives in Toronto and tends to forget that.
The income requirement for Visa Infinite or MasterCard World cards is only 60k personal income OR 100k household income.

So basically any 18 year old from a upper-ish middle class family qualifies once they can get some credit history. Further, once you get to 3+ working adults in a household you don't even need any one of them in particular to be making all that much money in order to reach that household income threshold, and that's an increasingly common scenario as the cost of housing rises (which has spread far beyond Toronto at this point).
Deal Guru
Dec 5, 2006
13064 posts
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Markham
VerticalTab wrote: The income requirement for Visa Infinite or MasterCard World cards is only 60k personal income OR 100k household income.

So basically any 18 year old from a upper-ish middle class family qualifies once they can get some credit history. Further, once you get to 3+ working adults in a household you don't even need any one of them in particular to be making all that much money in order to reach that household income threshold, and that's an increasingly common scenario as the cost of housing rises (which has spread far beyond Toronto at this point).
That's his point, most people are not upper-ish middle class. And how many households have 3+ working adults
[OP]
Newbie
Mar 1, 2019
51 posts
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Going by the medians for household income, most 2 parent households with children would qualify. Further the broader category of "economic families" has a median income of 85,600, so while it's hard to know without finding more detailed breakdowns I'd guess a pretty decent proportion of households would qualify, regardless of how many working adults they took to get there.

Mostly these cards just aren't actually that exclusive.

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